The last week of March gave Alabama three reasons to focus on a looming crisis that threatens not just the state’s budget, but its ultimate solvency. From Montgomery’s Goat Hill to the U.S. Supreme Court on Capitol Hill, Medicaid grabbed headlines for piling unsupportable costs onto state budgets.

The first occurrence was the growing media awareness that Alabama’s Medicaid budget was wildly unbalanced — $81 million worth — even after "saving" $111 million from the $643 million originally projected. Shortly thereafter came the announcement that state Medicaid director Bob Mullins, M.D., would soon resign after candidly acknowledging that his background in medicine, rather than finance, made him unsuited for the crisis.

Finally, the nation’s highest court heard a half-day of arguments about whether Obamacare’s new Medicaid requirements unconstitutionally commandeer state governments into a system they cannot afford.

In 2011, Gov. Robert Bentley pushed the Legislature to expand the state’s Medicaid budget and move toward participating in Obamacare’s new system. Alas, the arithmetic never matched his good intentions.

Federal and state governments share Medicaid costs, but Obamacare by design will add millions nationwide to state Medicaid rolls while picking up the added costs only in the short term.

As it happens, we were looking into the Medicaid budget for several months before Dr. Mullins resigned. In an emailed interview with us in early January, Dr. Mullins downplayed potential savings from possible reforms in how the state handles malpractice claims, saying "research suggests that Medicaid patients are no more likely to sue than any other patients."

He also suggested that "the sustainability of Medicaid depends on an improving economy that reduces our rolls and improves Alabama’s tax base." Nowhere did he explain how even an expanding economy could handle another half-million Alabamians expected to join the Medicaid rolls after full implementation of Obamacare.

Before the $81 million error was discovered and before Gov. Bentley was forced to prorate the state’s budget (making across-the-board cuts due to revenue shortfalls), and even without full implementation of Obamacare, the state General Fund’s budget for Medicaid had doubled in just two years. To put this into perspective: During this two-year period, our court system was cut by a third, our criminal prosecutors’ offices by 14 percent, our Forestry Commission by 17 percent and our economic development by 5 percent.

Medicaid went from consuming 20 percent of our General Fund budget two years ago to 36.5 percent this year. It is on track to consume the entire General Fund by decade’s end.

Regardless of what the U.S. Supreme Court does, Alabama must be creative. Whoever is hired to replace Dr. Mullins should consider the following ideas, not just to save money, but also to improve the quality of care:

1) Contract with a private company to handle Medicaid claims processing, and institute regular outside performance reviews. Xerox, for instance, already handles the former task for 11 other states, achieving significant efficiencies.

2) Encourage the attorney general to aggressively pursue Medicaid fraud, by allowing his office to keep some of the savings achieved.

6) Do everything possible to secure waivers, on multiple fronts, from Obamacare and other cost-heavy national regulations.

7) Fix the bureaucracy that made the $81 million error.

Led by state Sen. Jim Barton, R-Mobile, the Legislature already is working hard to achieve Medicaid savings. Without aggressive solutions from all parts of state government, Alabama’s indigent care health program will become unsustainable and drag the rest of state government down with it.

Quin Hillyer is a Senior Fellow of the Center for Individual Freedom (http://cfif.org/v/). Bradley Byrne is an attorney and chairman of Reform Alabama. Janet Taverna, president of the Fairhope Chapter of the Common Sense Campaign, contributed research for this essay.